Tata Launches Nano in India; U.S. Intro May FollowBy Michelle Krebs March 24, 2009
By Nick Kurczewski
MUMBAI, India - With much celebration, Tata Motors, India's largest car manufacturer, revealed the production version of its highly anticipated Nano city car in a series of elaborate press conferences held Monday in Mumbai.
The tiny car could find its way to the U.S. in a couple years, a market that wasn't on Tata's agenda before the recent economic crisis and last summer's gas prices that caused Americans to shift to smaller, more fuel-efficient vehicles.
"We believe that in the next three years or so, we should be able to meet U.S. requirements," Ratan Tata, chairman of the Tata Group, said during the first of a series of elaborate press conferences held during the debut of the Nano on March 23, in Mumbai. Although it was developed for the needs of Indian car buyers, that doesn't preclude a future for the Nano in the U.S.
Ratan Tata, the 71-year-old scion of the multibillion-dollar Tata empire, may have dropped a hint about the global intentions of the Nano during the Geneva motor show earlier this month. "I think the days when you designed a car for one particular region are over. There are no more borders," he said. The same could soon be true when it comes to the tiny Nano.
In Geneva, Tata displayed a more powerful and more luxurious version of the Nano, the Nano Europa. At the time, Tata officials confirmed the Europa would go on sale in Europe by 2011.
"We have been looking at the U.S.," Ratan Tata said, adding that the company is currently working on a prototype (based on the higher-spec Europa version) that will meet American safety and emissions requirements. He said U.S. sales will have to wait until the car proves itself in India and then Europe. But judging from recent comments, U.S. sales of the Nano are now firmly on the company's radar.
How Tata Motors approaches the American market could depend on several factors. Having invested six years of engineering -- not to mention one aborted factory -- to the Nano project, it's feasible other variations of the car might come to market. Even launching the Nano as a sub-brand -- in markets where the Tata Motors name is a non-entity -- could be an option.
Does this mean a Nano coupe, minivan, or even convertible might come to market? It's not out of the question, according to Girish Wagh, Tata's head of small-car projects and the man behind the Nano.
"One needs to be mindful of the fact that [the rear-engine Nano chassis] is limited," said Wagh during the Nano launch here.
However, he quickly added that the company could make the car "more amenable" to other versions by re-engineering it. In terms of what he referred to as "leveraging the platform," Mr. Wagh did not rule out other variants of the Nano appearing in the near future. Tata Motors has already confirmed plans to develop an electric-powered Nano, as well as a version using a motor powered by compressed air.
The Nano's U.S. future also could depend on the fortunes of Chrysler LLC and Italian carmaker Fiat S.p.A. The two auto giants recently signed an agreement in which Fiat takes 35 percent in Chrysler in return for access to the company's distribution network as Fiat plans to reintroduce itself to the American market.
In return, Chrysler gains access to Fiat's lineup of small cars -- vehicles the American auto giant desperately needs to balance its current range of fuel-guzzling SUVs and pickups. The joint effort, however, is largely dependent on Chrysler receiving additional loans from the U.S. government to help ensure that it avoids bankruptcy and liquidation.
Should Chrysler revive itself and the Fiat partnership blossom, the joint venture could present Tata Motors with another route into the American market. Fiat and Tata already co-own and share a factory in India. The two companies are also partnering in the truck segment.
And at least until the financial crisis hit, Tata and Chrysler had been in discussions to market an electric-powered version of Tata's Ace utility vehicle in the States. In Mumbai, during the Nano launch, Ratan Tata said he wasn't against the idea of another car maker selling a rebadged version of the Nano as its own. However, he added that no "direct discussions" had been held.
Another alternative is through Tata's already established network of dealers in the U.S.: last year, Tata purchased the Jaguar and Land Rover brands from Ford Motor Co. A third Tata franchise, leveraging the existing Jag/Land Rover dealer network in a fashion similar to BMW's Mini or Daimler's smart, could be a possibility.
Or even General Motors' Saturn division, likely being spun off from the mothership or being discontinued in the future, has discussed having dealers own the brand and sell a variety of vehicles, including those from China and India, through Saturn showrooms.
Keeping the Promise to India
For now, the focus is on India. As the Tata Nano was unveiled at Mumbai's Taj Hotel, Ratan Tata announced, "We have made a promise and we have kept that promise."
It was just over a year ago that Ratan Tata announced at the New Delhi auto show his goal to build a car that started at a mere $2,000; in India that translates into 1 lakh or 100,000 Indian rupees. That price would allow those in India to move from two wheels to four, earning it the nickname "The People's Car."
Much was revealed about the Tata Nano's specifications at the New Delhi auto show last year and at subsequent auto shows, including the recent Geneva motor show. Base models do without power steering, power brakes, or even door pockets. A radio, airbags, ABS and even an opening rear-hatch are unavailable on even the highest of the three Nano trim levels: Base, CX, and LX.
A 624-cc inline two-cylinder is the only engine offered, though plans exist for a diesel engine to join the range (possibly later this year). The Europa variant, expected by 2011, definitely is earmarked for a more powerful engine.
Deliveries of the Nano have been pushed back again - this time to mid-summer. This comes after what has already been more than six months of production delays. Escalating political protests over Tata's land acquisition methods forced the closure of the factory originally slatted to build the car.
A new plant is now being built in the eastern states of Gujarat, but Tata officials acknowledge that demand for the Nano will surpass supply until the factory is fully operational by early 2010. For now, the Nano will be built at a rate of 3,000 to 4,000 per month at one of Tata's existing factories.
In India, applications to buy the Nano can be submitted from April 9-25. The first 100,000 Nano buyers will be chosen randomly by computer in a sort of lottery. Tata will then provide a "price guarantee" to avoid price gouging or greedy speculators looking to cash in on the world's cheapest car.
Nick Kurczewski is correspondent for Edmunds.com and Edmunds' AutoObserver.com. He covered the New Delhi auto show last year and this week is covering the launch of the Tata Nano, which includes a media test drive.
Photos by Auto India magazine
1 - Tata Motors Chairman Ratan Tata introduces the Tata Nano at the Taj Hotel in Mumbai Monday.
2 - Reporters gather around the newly introduced Tata Nano.